China has nearly tripled its use of export controls in the past five years, a report shows, underlining Beijing’s willingness to leverage its power over supply chains as Xi Jinping prepares for talks next month with US President Donald Trump.
The findings come after Beijing this month unveiled sweeping regulations that will allow authorities to penalise foreign companies for conducting due diligence on their Chinese suppliers and to impose exit bans on individuals found to violate the rules.
China announced restrictions on exports 30 times between 2021 and 2025, the report by the EU Chamber of Commerce in China found, up from just 11 in the previous five years.
Since 2020, Beijing had turned to “geoeconomic” controls — measures aimed at achieving geopolitical goals, it said. These include 10 that made use of global chokepoints in supply chains, such as China’s rare-earths exports, and 10 others aimed at coercing other countries using economic measures.
Beijing has stepped up use of the measures in response to export restrictions by the US on products such as semiconductors, culminating last year in China using controls on exports of critical minerals to force Trump to agree a truce in their trade war.
Jens Eskelund, president of the EU chamber, said China needed some export controls for “hard security questions” and its concerns about others weaponising trade were understandable, but there was a risk of a “race to the bottom”.
“We really need people to step back, take a rational perspective on this and ask themselves whether this is really in the best interest of everyone,” Eskelund said.
“China has an opportunity right now, given its role in global supply chains, to . . . demonstrate to the world that yes, we might have disagreements with other countries, but we are not going to risk global prosperity,” he said.
China’s increasing use of export controls is a demonstration to Trump, who is set to visit Beijing in mid-May, and other foreign leaders that Beijing is willing to retaliate against efforts to close their markets to Chinese goods or to restrict its access to important industrial inputs or technology.
China, which recorded a record trade surplus of $1.2tn last year, relies on net exports to meet its growth targets and offset a weak domestic economy, even as it ploughs public funds into advanced industries to compete with the US for tech supremacy.
China has been constructing its legal toolbox of trade countermeasures for years, issuing an export control law in 2020 governing dual-use goods as well as other legislation on foreign investment, trade and the countering of foreign sanctions.
These build on previous rounds of informal Chinese coercive measures, such as cutting off rare-earth supplies to Japan in 2010 during a territorial dispute and blocking Australian imports after Canberra called for an investigation into coronavirus five years ago.
The latest round of controls, the “State Council Regulations on Industrial and Supply Chain Security”, which came into effect on March 31 but were only announced last Tuesday, is among the most potent yet.
Signed by Premier Li Qiang, China’s second-ranked leader, the vaguely worded rules make it illegal to “harm the security of the country’s industrial and supply chains” and raised the spectre of exit bans for violators, analysts said.
The 13th article of the regulations threatens action against anyone who “carries out information-gathering activities related to industrial and supply chains in China”.
Article 15 gives Chinese authorities sweeping powers to investigate and impose countermeasures against any foreign organisation or individual that “interrupts normal transactions” with Chinese counterparties.
“For organisations and individuals that violate the provisions” ministries can “prohibit or restrict them from leaving the country”, article 16 says.
Zhan Kai, a Shanghai-based senior counsel at Chinese law firm Yuanda, said the rules reflected broad efforts to “build leverage in trade negotiations from both the China and US sides” ahead of Trump’s visit to China, which was postponed from early April.
The measures gave China the ability to respond to American regulations, such as a recent USTR Section 301 investigation introduced by Trump to allow the reimposition of tariffs after his attempts last year were blocked by the US Supreme Court, lawyers said.
They said the new regulations were also probably a response to the US Uyghur Forced Labor Prevention Act that aims to prevent products made under duress by ethnic minority peoples in China’s western region of Xinjiang from being sold in the American market, they said.
Trump’s “One Big Beautiful Bill Act” last year also contained supply chain restrictions on products from China, lawyers said.
“The Chinese government wants to have a fairly broad toolbox in order to respond to a whole series of moves by foreign governments,” said Dai Menghao, a trade compliance partner at law firm King & Wood.
James Zimmerman, a partner in the Beijing office of Loeb & Loeb, said the new rules restricting supply chain due diligence were “counter-productive”, preventing sophisticated buyers from applying not only quality control but also internationally recognised labour standards when doing procurement.
“When a supplier fails to meet a buyer’s standards and is ultimately cut off, this actually encourages the supplier to raise its standards which, in the long run, improves the security of China’s supply chain,” Zimmerman said. “The messaging is that all buyers are at risk if they choose to enforce fundamental labour standards.”
In a separate statement, EU Chamber head Eskelund said European companies often needed to comply with European directives requiring them to audit their supply chains.
“There is a risk that the information that needs to be collected as part of this process could be interpreted as violating Chinese law,” he said.
The regulation “increases the risk of doing business in or with China”, he said, calling for more clarity on the new rules.
Data visualisation by Haohsiang Ko in Hong Kong
